In a periodic inventory system, when a company returns merchandise previously purchased on account, the entry to record the return would include a:
A)debit to Inventory.
B)credit to Purchase Returns and Allowances.
C)debit to Sales Returns and Allowances.
D)credit to Accounts Payable.

Question

Quizplus · Accepted Answer

In a periodic inventory system, purchase returns are recorded by crediting the Purchase Returns and Allowances account, which reduces the total purchases.

In a Periodic Inventory System, When a Company Returns Merchandise